Administration for Clinton Cards over debts of pounds sterling 35m

Clinton Cards is the latest retailer to collapse into administration after an extraordinary day in which its main supplier bought pounds sterling 35m of the debt and promptly called in the loan.

Britain's biggest greeting card chain had already fallen foul of the terms of the loan but had been given a grace period by taxpayer-controlled lender Royal Bank of Scotland, and Barclays, to come up with a rescue package.

In a surprise move the two banks sold the debt to New York-listed American Greetings, the main supplier to Clinton, leaving the future of more than 8,000 workers and 767 stores at risk.

RBS is understood to have thought it was not its place to get assurances over the future of the firm, considering the transaction as "capitalism at work."

Clinton anticipated American Greetings would extend the waivers granted by the banks and start talks with a view to supporting it.

The two family run firms have been trading together for the past 40 years.

But instead American Greetings said it intended to enforce the terms of the loans and Clinton was forced to hand the controls to accountant Zolfo Cooper. Clinton said: "The board has concluded that because it is unable to repay the loan it has no option but to concur with American Greetings' proposal to place the company and its subsidiary into administration."

In a statement from American Greetings it emerged the firm had recently stopped shipping stock to Clinton along with what it claimed was a number of other suppliers, after Clinton defaulted on its "payment obligations."

In such circumstances UK quoted firms are usually obliged to issue a statement to the stock market.

However it is unclear how recently these supply deals were terminated. It is understood the firm is confident there was no breach of City guidelines.

American Greetings said it has pounds sterling 15m of unsecured exposure to Clinton which is largely unpaid stock.

In buying Clinton's debt it will have more say over the future of the firm which it relies on to sell the bulk of its cards.

The US company said: "As a secured lendr we are better positioned to assist in identifying and obtaining the best possible solution for Clinton, where we may ultimately participate in the ownership of the business or may continue as a supplier to any buyer of the business."